I
n a seismic shift, big cities are making a comeback as the go-to destinations for homebuyers. At the forefront of this trend is San Francisco, where 57.2% of homes sold above their initial listing price in February, according to Redfin's analysis of the nation's most populous metropolitan areas. This surge can be attributed to pent-up demand and an abundance of deep-pocketed buyers.

    A closer look at the numbers reveals that half of the eight metro areas experiencing this uptick are concentrated in the Bay Area or New York. San Jose, California, and Nassau County, New York, follow closely behind with increases of 3.5% and 4.4%, respectively. Meanwhile, Milwaukee and San Antonio have seen modest gains of 2.7% and 2.4%.

    Bay Area real estate agent Josh Felder attributes the sustained growth in home prices to a perfect storm of factors: limited inventory and the continued boom of the tech industry. However, he notes that the market has slowed in March due to buyers holding out for more properties to choose from.

    In contrast, other cities are experiencing a different reality. San Diego tops the list of big cities where more buyers paid below the listing price in February, with 51.2% of homes selling for less than their original asking price – an increase of 8.9 percentage points year over year. Anaheim, California, and Charlotte, North Carolina, follow closely behind, with increases of 8.7% and 7.3%, respectively.

    As the market continues to evolve, Redfin warns that 2025 is shaping up to be a buyer's market due to high mortgage rates and increasing inventory. This shift marks a significant departure from the rapid rise in home prices during the pandemic era.